[UPDATED] Najib, son win appeal to stay bankruptcy proceedings over RM1.7b unpaid tax

Najib Razak and his son Nazifuddin have won their appeal to halt bankruptcy proceedings initiated by the Malaysian government over unpaid taxes totalling RM1.7 billion. A three-judge Court of Appeal panel, chaired by Datuk Dr Alwi Abdul Wahab, unanimously granted the appeals, stating that continuing the bankruptcy proceedings could affect Najib's ongoing tax appeal and interfere with other legal matters.

The judges, comprising Alwi, Shahnaz Sulaiman, and Ong Chee Kwan, dismissed the High Court's November 17, 2025 decision, which dismissed their stay applications. Alwi emphasized that Najib's pending appeal to the Special Commissioners of Income Tax raised significant issues that required a determination, which the lower court had failed to address.

The Court of Appeal also highlighted the withdrawal and reissuance of Najib's tax assessments in 2019, questioning the Inland Revenue Board's actions and the treatment of refunded donations and funds in the RM1.69 billion tax assessment. The court also acknowledged the overlap between funds subject to the additional tax assessment and those implicated in criminal charges, questioning whether the alleged unlawful proceeds could be taxed as legitimate income.

The bankruptcy order would have automatically halted these ongoing proceedings, potentially disrupting justice and delaying important litigation. The judges noted that while the "pay first, dispute later" mechanism under the Income Tax Act aims to ensure tax collection, it does not bar the court's inherent jurisdiction to intervene if justice requires it.